How do unis take into account contextual offers?

Unis use details on your UCAS application like your postcode, or whatever other criteria they use, to tag you for a contextual offer. Its automatic - you do not need to do anything.

Unis will list the contextual offer grades and the standard offer grades on each course page under 'entry requirements'.
If you qualify for a contextual offer - ie. you meet that Uni's criteria - you only need to be predicted the lower grade set, not the standard offer, to be in contention. You are not guaranteed an offer - no-one is - but if you are made an offer, it will be the lower grades.

I understand, but If u are eligible for a contextual how would they know not to scrap ur application if u don't meet the normal requirements for that course