To remove your contacts log in on a computer with your gmail account and go to the contacts there. There is an option with all of your contacts and you can select them and delete them.
Thats not what he meant. Ignore that lol
All you have to do is a "Factory Reset" before you sell it. That will remove all your information from the phone including contacts, email, text messages, etc. Just make sure you also remove the microSD card.