Before to build the outline you should have the points in your plan.
The outline defines the perimeter of the terrain and it automatically fits to the existing points.
"What is the proper sequence to create a terrain from ArchiCAD 2d contours?"
If you have ArchiCAD 2D contour lines inyour plan, the first thing you should do is tranform them into ArchiTerra contour lines.
Select one contour line (or more contour lines if they have the same level) then click on the ArchiTerra contour line tool.
ArchiTerra, following the selected contour geometry and using the defined level, will insert into your plan hotspots/points and lines/constraints.
When you transformed all the existing contour lines into ArchiTerra contour lines you can use the Outline tool (you can just draw a rectangle around the ArchiTerra points and it will be "adapted" to them).
Once you have the outline, select it and click on the terrain tool and the terrain/mesh will appear.
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