Outside Contour and Inside Contour
An outside contour is a line that rests on the outermost edge of the figure. An inside contour lies within those edges, usually bordering an interior form.
When drawing the figure, artists are continually looking for opportunities to pull outside contours into the interior of the form, making them inside contours. One of the grand masters of this was Rubens, whose contours are like a roller-coaster ride, whipping from the edge to the interior of the form (and often back again) with remarkable variety. Beginners, in comparison, draw tedious outside contours that can be followed around the edge of a whole mass, resulting in a cut-out effect that no shading will remedy.
The guiding idea behind this is that each of any two forms at the edge of the figure has a distinct three-dimensional mass. One of these masses is in front of the other, either physically (such as deltoid lying on top of biceps) or spatially, in that one form is closer to the viewer's eye than the other. Therefore the contour of the closer form is brought into the figure's interior, cutting off the line of the neighboring form.
What happens at this intersection is worth careful examination. The rule in drawing is that high contrast advances and low contrast recedes. A crisp, dark line will come forward in space; a soft, light line will drop back. So right before disappearing behind an advancing contour, the receding line suddenly becomes lighter and softer, and may disappear entirely before touching its neighbor.
In a shaded area, such a lightening of pressure in the line will cause it to be absorbed into the surrounding shadow, becoming softer as it does so.
Though simple, this is a powerful technique that has been used by art's greatest masters. Of course, it is anatomical knowledge - understanding how muscles and bones are stacked up in space before the artist's eye - which makes it so effective in the hands of those masters.