You appear to have a script called contour.m. This script takes no arguments - that's why it's a script and not a function. Unfortunately you called this the same name as a built-in function called contour() and you seem to be wanting to call the built-in function countour() from your script also called contour. But when you called your script contour, this takes precendence over the built-in function, so on line 3 when you call contour(X, Y, Z), it's calling your script instead of the built in contour() function. (To add insult to injury, it's trying to call it recursively) However your script contour does not take/accept any arguments like X, Y, or Z, so that's why you get the error.
Rename your script to contour_test.m and it should work (as long as you define X, Y, and Z.