A contract limit is the maximum number of futures contracts you may hold open at the same time on a plan. It is set by the firm and usually rises with account size: a small plan allows fewer contracts than a large one. The cap applies to open positions, so a contract you have closed no longer counts against it.
This limit exists because contracts multiply risk fast. One futures contract can move hundreds of dollars on a normal day, so ten contracts move ten times that. Without a cap, a trader on a small account could take exposure far beyond what the loss limits were designed to hold.
The cap interacts with scaling. A plan that raises your account size after a milestone usually raises the contract limit too, but the two do not always move together, and the new limit still needs checking before you size up.
The common trap is planning a strategy around more contracts than the plan allows, then finding the extra orders rejected at the moment you need them. Check the contract cap for your exact plan size on the rules page before you build a strategy around a position count. Prop trading can cost you every fee you pay.