The problems of artificial intelligence, control and decision-making with incomplete or unreliable information include a wide class of problems of abductive explanation of the observed, including cause–effect problems. The study is devoted to the substantiation of the method of logical formation of hypotheses explaining the observed. Means of knowledge representation and derivation of hypotheses are proposed. A language possessing the property of substitutability is introduced. The properties of language and the calculi introduced in it provide hypothesizing by combining deduction and abduction. In contrast to the well-known logical methods of abduction, the proposed techniques make it possible to derive hypotheses (minorants) that are necessary and sufficient for a formal explanation of the observed. Based on minorants in combination with the basic theory of the subject area, reliable causes of the observed or relevant circumstances leading to these causes are formed. In this case, in situations with the availability of empirical data, these causes and circumstances can also be formed in plausible versions. Examples from technology and medicine are considered.