Don’t forget, in SQL Server null is never equal to anything.  So use IS NULL to check for columns with NULL.

UPDATE Stage_Enrollment
  SET [RECD-ERROR-CODE]='PO# INVL'
  where ([REC-TYPE] = 'D') AND ([CONT-NUM] IS NULL
    OR LTRIM(RTRIM([CONT-NUM])) = '')

Bonus: boolean test if string is not a date: IsDate([CANCEL-EFF-DATE]) = 0 ... returns 1 if valid.

Bonus: sql server full trim, LTRIM(RTRIM([TOTAL-REFUND])) 

Bonus: when updating, add column value based on another column: (SELECT CASE WHEN RECD_ERROR_CODE IS NULL THEN 'R' ELSE 'N' END) AS CANCEL_FLAG