If you reset the device and it is still giving you these problems, I would start to wonder if there isn't something wrong with the phone. Especially if the contacts have never worked. If that is the case, I would contact the seller or the manufacturer.
If, however, it did work and now isn't, I would try the following.
1. If the contacts are on a SD card and not the phone itself, try removing the SD card and then remounting it. Then move the contacts to the device.
2. If that doesn't work, try starting the phone in "Safe Mode". All things won't work in "Safe Mode" but your contacts should open. If it is a virus or bad app interfering with the contacts app, then that app should open fine in "Safe Mode". If it does, then I would restart...