Edit the Contact, in the Details window is a Normal Stiffness, change that to Factor and enter a 0.1 value. A value less that 1.0 will soften the contact and reduce the "chatter" that is occuring on your contact, which is probably too stiff. You can try a value of 0.01 if necessary.
There is another setting which is to Update Stiffness, set that to Each Iteration.
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