Contour is a tool that allows you to turn on and off parts of a layer. It does this by filling in (turning on) or making invisible (turning off) the piece that you click. The contour will do the opposite of the original layer.
For example, if a piece of the design is transparent, the contour tool will fill that with a solid black and this is what allows you to now color that part of the image.
The opposite is also true. If you click a part of the image that is solid black, it will make it transparent and remove it from the layer.