The two-beam dynamical theory of electron diffraction in absorbing crystals has been applied to explain features of bend and thickness extinction contours and of images of stacking faults observed on transmission electron micrographs of metal foils. Inelastic scattering processes affect the intensities of the elastically scattered waves and give rise to `anomalous' transmission (Borrmann) effects. The formal theory takes account of these effects phenomenologically by the use of a complex lattice potential but ignores the contribution of the inelastically scattered electrons to the image. In the theory absorption is described by certain parameters $\xi'_0$ and $\xi'_g$ with dimensions of length. These parameters are determined by Fourier coefficients of the imaginary part of the potential in the same manner as the extinction distance $\xi_g$ is determined by the Fourier coefficient of the real part. A simple physical explanation of the `anomalous' absorption effect is developed in terms of the two crystal wave fields. This explanation is particularly helpful in understanding details of bend and thickness contours and of images of stacking faults. The theory is at present phenomenological because the detailed mechanism of the absorption process is not understood. Nevertheless, comparison of the theory with observations enables the absorption parameters to be roughly estimated.