Here are examples of things a retailer cannot contract out of, even if they attempt to by stating it in their terms of sale:
(1) they cannot limit liability for misrepresentation or fraud.
(2) they cannot compel customers to resolve disputes through arbitration instead of court.
(3) they cannot limit or exclude liability for negligence.
(4) they cannot limit liability for the supply of defective goods.
In Ontario, a customer is never bound by any terms of sale that contravene the above, even if he agrees to the terms by making a purchase.
The 4th one is relevant here. That falls under both the Consumer Protection Act and the Sale of Goods Act.
Here are the relevant clauses from the Sale of Goods Act (for ON, but likely similar for other provinces):
14. Where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description, and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. R.S.O. 1990, c. S.1, s. 14.
16. (2)(c) that the goods will be free from any defect rendering them unmerchantable that would not be apparent on reasonable examination of the sample. R.S.O. 1990, c. S.1, s. 16.