A cut contour line is a digital line added to a vector image prepared in a vector graphics program like Adobe Illustrator that tells the cutting machine where to cut. The line is not printed it is only used to cut.
Also may be referred to as "digital die-cut"
Typically the cut contour line is automatically set as the artboard perimeter. For square-cut projects make the artboard the finished sized. For projects the have a cloud cut or die-cut: create an outline representing how you would like it cut. Add a 0.25pt stroke with the color at 100% magenta. Place this on a new layer titled "Cut Contour" and place it on the top layer of your artboard.